The present invention relates to systems and processes for dispensing currency to a cardholder in response to an authorization over an electronic data network.
A variety of cards arc available to enable a customer to electronically interface with a financial institution. Credit cards arc a well-known example of this, plastic cards having a magnetic stripe with an encoded account number. These cards can be read by special terminals at a merchant's site, commonly referred to as point-of-sale (POS) terminals. The account number can then be transmitted over a network, such as the VisaNet network. In addition to the account number, the amount of the transaction is also transmitted for authorization. A remote main-frame computer checks a database to determine if the credit card customer is still within his/her credit limit, before authorizing the purchase.
Another type of card is a debit card, which is not used to extend credit, but rather to withdraw cash or pay a merchant immediately. The amount of the transaction is deducted from the customer's checking account, which the customer can periodically replenish. Here, the customer must have the money in the account before the transaction is approved, rather than having to pay the money on credit extended, as for a standard credit card.
Another type of card is an automated teller machine (ATM) card. These are typically issued by a particular financial institution or bank, allowing a customer to access the customer's checking or savings account for withdrawal from a remote ATM. The remote ATM is connected through an ATM interchange to various banks subscribing to a particular ATM network. Like a debit card, this card causes an immediate deduction from the customer's account. The immediate deduction is actually a same day or same night deduction, since the amount of the transaction is typically recorded, and then actually processed in batch mode at night with other transactions. One danger of the ATM system is that of a lost or stolen card. The use of a Personal Identification Number (PIN), known only to the customer, eliminates much of the risk. Another control is imposing a daily limit, $200, for instance, on any withdrawals by a particular card during any day.
Other types of cards store the account amount directly on the card. An example would be a transit card, such as cards for the Bay Area Rapid Transit (BART) District. When these cards are purchased, the dollar amount of the card is magnetically recorded on the card. Each time the card is used by passing it through an access terminal, the fare is deducted from the amount on the card, and a new card value is magnetically recorded on the card itself. An advantage of such a card is that if it is lost or stolen, the potential loss value is only the amount recorded on the card itself. A disadvantage is that there is no ability to contact the issuer and freeze the remaining account balance.
Other than these different types of cards, and currency itself, there is yet another device for obtaining cash which is very popular. That is the paper travellers cheque. Travellers cheques are desirable as compared to currency because of the signature authorization required and the ability to report them as stolen or lost and identify them by serial number. In addition, they are issued in limited amounts, and thus may limit the possible exposure. Unlike debit cards or credit cards or even ATM cards, there is no account number which can easily be verified online to see if the account has been closed.